2. A trading strategy used by futures traders who intend to profit from the decline in commodity prices while limiting potentially damaging losses.
1. You make money if the underlying goes down and lose if the underlying rises in price.
2. A bear spread is created through the simultaneous purchase and sale of two of the same or closely related futures contracts. This is accomplished in the agricultural commodity markets by selling a future and offsetting it by purchasing a similar contract with an extended delivery date.
Investment dictionary. Academic. 2012.
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